September 2018 was an interesting month for markets. While equity markets succumbed to a sharp correction due to trade war concerns, liquidity crisis fears and a generally negative sentiment on BFSI sector, debt markets saw IL&FS defaults and rupee depreciation take the wind out if its sail. It is interesting to note how investors reacted to the whole situation. Equity investors, driven by retail SIP investments, continued to give their vote but corporate & institutional investors drew record amount from liquid and income funds. Let’s take a look at what AMFI data for September 2018 revealed today shows.
Industry’s debt date
The MF industry which was celebrating Rs 25.2 lakh crore AUM size in August got a shock in September. The AUM shrank by over Rs 3 lakh crore to Rs 22.04 lakh crore. While the shrinkage of assets is due to AUM of equity funds dropping due to market-linked losses, the main driver was the outflow in two debt funds – liquid and income schemes.
Liquid funds saw a record Rs 2.11 lakh crore as net outflows, the highest monthly amount ever. Income funds saw net outflow of Rs 32,504 crore. Gilt funds also saw Rs 968 crore net outflow this month. Quarter end redemptions, advance tax submission requirements and IL&FS credit defaults spooked investors.
Thankfully, investors showed maturity and did not pull out of equity funds in a month where the Sensex fell by over 6%. Equity schemes saw net inflow of Rs 10,237 crore. Balanced funds saw Rs 731 crore net inflow. ELSS equity saw Rs 935 crore net inflow. Other ETFs saw Rs 2,409 crore coming in net inflows in September 2018.
Equity schemes continue to benefit from SIP inflows. As much as Rs 7,727 crore came in through SIP route in September compared to Rs 7,658 crore in August. N.S Venkatesh, Chief Executive, AMFI said: “”Despite the market volatility and the credit event which occurred, the flows in the equity segment of the market from the retail investors have been positive. It has shown an amount of about Rs 12,000 crore of positive inflows. The quarterly average AUM for the quarter ended September 2018 shows a Y-o-Y growth of 16%. There has been a robust growth in the number of folios at 26% annual growth rate, which now stands at over 7.75 crore. SIPs continue to show an increasing trend.”